What on Earth’s going on with Flagship Studios? The short answer is it’s not entirely clear yet. But some newsmen are claiming that the creators of Hellgate: London, and the forthcoming Mythos, are shutting up shop, with the ownership and IP of both games transferring elsewhere. Blimey. How did it come to this?

There are two overlapping stories which may well prove to be linked at the middle. First it was rumoured that staff were upping and leaving last month, and then more recently we heard about a very peculiar electronic scuffle over the IP rights to Hellgate itself.

According to Hellgate Guru’s translation, HanbitSoft, who co-own the IP for Hellgate with Flagship, announced that they were taking full possession of the IP. Remarkably they stated,

“It is hard for us to accept Flagship Studios’ requests for continued support in capital and funding any longer and because Flagship was being difficult.”

Flagship quickly fired back to the site with a statement emphatically denying the story.

“This story is an outright lie. We have no idea where they are getting their information from and have asked legal counsel to pursue the issue. We are mystified by Hanbitsoft’s conclusions and any attempt to take over the IP will be met with a strong and swift response, to “illegally take over the IP”. All right title and interest in Hellgate; London resides in Flagship Financing, LLC a wholly-owned subsidiary of Flagship Studios. We are outraged that Hanbitsoft would attempt to completely tarnish the reputation of its most vital developer. Hanbitsoft’s new management clearly does not understand the terms of its relationship with Flagship.”

Things got even messier fast. HanbitSoft are threatening Guru with legal action if they don’t remove the story, but not before hefty rumours starting appearing that Flagship were beginning mass layoffs.

Gamasutra are stating that “significant layoffs” are confirmed. A source assures them that staff are to go. However, significantly, the two stories still don’t line up.

So by this point things would seem to be that both HanbitSoft and Flagship are denying the IP-takeover story entirely, and with lawyers being mounted on flagpoles, but jobs were still going. Fascinatingly, the option to unsubscribe from Hellgate mysteriously disappeared from players’ account pages during this time. And then…

“Flagships’s Community Manager, Taylor Balbi, has revealed, through sources, that all Ping0 and Flagship Studios staff have been made redundant. Employees were notified at a company meeting and subsequently informed that the offices will be officially closed on Saturday. Balbi went on to reveal that three of the studio’s top brass dug into their own pockets to provide 30 days of pay to all employees.”

This would finally seem to link the two stories. HanbitSoft had heard about the closure and were reacting to it. A US HanbitSoft lawyer has now stated,

“It is unfortunate that Flagship turned down additional investments HanbitSoft offered to make that would have allowed it to keep its doors open.”

We’ve contacted contacts at Flagship to find out what this means for Mythos and so on. Which HanbitSoft apparently want to keep developing themselves. But expect this story to either reveal more or change dramatically again. Things seem pretty heavily soaked in rumour and speculation at this point.

Update: Good Lord, this is getting weird. Now Flagship’s Taylor Balbi says Voodoo Extreme’s quote from him is not, in fact, from him: “Well, Andrew I don’t want to tell you how to do your job at VE3D, but normally you check the quotes before making them appear as fact. I didn’t say this at all, and I have never spoken to you or recall ever speaking to you about anything ever. I’m sorry, but this news article is just not from me.”

Voodoo writer Andrew Burnes is fighting his corner nonetheless, claiming he has a reliable source for the quote/gossip. It’s notable that there hasn’t been an official denial of the closure – only of the quote – but we shall see what Monday brings. Follow the ongoing saga here.

So, there’s a chance Flagship might still be in the land of the living after all. Let’s hope so. More news as we have it…

There’s a ginormo-thread over at the HGL forums. Up to p136 as I write this, and generating additional pages at terrifying speed.

Such a shame, since HGL is (now) actually a lot of fun. Pity they refused to modify their charging model to something more appropriate for this sort of title, but making new content for all of five paying customers isn’t going to keep the doors open.

Alec: Yes, it’s very weird, particularly since Balbi isn’t saying they got the quote wrong or presented it out of context, but that it’s an outright fabrication. Andrew’s comment seems to indicate he’s on shakier ground as his “news story” is evidently second hand and may be incorrect.

It appears that they tried to put out a broken game which relied on its gameplay to appeal to potential customers. When people realized that was broken, they decided not to buy. No sales, no profit, no staff. They should have gone the way of the equally broken Age of Conan and relied on large breasts and great graphics as selling points.

Strange world — just a year ago we were trying to compete with Hellgate hype with The Witcher… and now this. Sorry to see it happen — if, indeed, it has happened — and best of luck to everyone at Flagship.

It appears that they tried to put out a broken game which relied on its gameplay to appeal to potential customers.

They didn’t even go that far… The entire hype for the game was built on what some of the staff did with Diablo and a few CGI promo videos. Nobody got to even play the game until the late pre-release Beta.

This whole thing may be an elaborate troll from some pissed off customer who figured out how to spoof email addresses.

Glad you didn’t use the “sinking” pun but I’m sure there’s still some kind of mileage to it. Flagship Studios’ bridge destroyed by crashing A-wing and plummeting nose-first into Death Star? Not quite there yet…

Optimaximal said: “They didn’t even go that far… The entire hype for the game was built on what some of the staff did with Diablo and a few CGI promo videos. Nobody got to even play the game until the late pre-release Beta”

I was able to get into the alpha for hgl in June 2007 and from there you could see this game was a flop. I dont know what was going through the developers heads.

Executive summary: Outsourced forum admin “Tiggs” is valiantly corralling the supernova of fan-angst and regretted tattoos into a single thread, the likes of which are rarely witnessed on the internet. Nobody else at Flagship appears to have the balls or the legal right to speak on behalf of the company. Founders are falling upon subscribers, who are falling upon the Commons.

I doubt this is a spoof or someone pretending to be an inside source. As this same inside source whose been contacting many game sites, first sent a news report into Flagshipped.com last Wednesday. Since it’s a form, it sent locally through the host network, but it tracks the senders address, an address that is within the IP blocked owned by FSS.

Typical bad journo work, with all of the lack of integrity inspired by the internet.

By the way, FSS community advocate Tiggs has promised a “statement” by Monday, and as of early Saturday/late Friday, the subscription feature was being worked on by engineering. It was not down for everyone all the time, just something that apparently crapped out.